Mexico Aerospace 2022 - Impact Report

IMPACT REPORT

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Despite the uncertainty the COVID-19 pandemic brought to the global aerospace sector, the local industry continues recovering and Mexico remains an attractive destination for local and foreign aerospace investment.

As international air traffic gradually returns to pre-pandemic figures and domestic traffic thrives, Felipe Ángeles International Airport (AIFA) began operations to ease the oversaturation at Mexico City International Airport and reduce delays. While commercial aviation recovers, air cargo faces major disruptions due to the Russia-Ukraine conflict and the e-commerce boom, among other problems. Meanwhile, industrial companies continue advancing toward more sophisticated processes to meet the big players’ demands despite ongoing global supply chain strains, further straining air cargo.

Amid these turbulent times, local and international industry leaders joined the conversation at Mexico Aerospace Forum 2022 to discuss the main trends, challenges and opportunities that the aviation and aerospace industries are facing. The aerospace sector has increasingly played a larger role within Mexico’s economy, expanding to more states and creating jobs and business opportunities across the country.

On April 27-29, 2022, experts from both the public and private sectors discussed the current state of the aerospace industry in Mexico, from AIFA, Queretaro’s aerospace potential and airline-airport synergies to the supply chain of the future, commercial aviation trends and opportunities in air cargo.

121 companies 419 conference participants

17% CEO/CFO/Country Manager 54% Manager/Director 08% President/VP/ Partners

21% Analist/Engineer/ Executives

Breakdown by job title Conference social media impact

7,494 direct impressions during MAF 14,867 direct pre-conference LinkedIn impressions

2.86% click through rate during MAF 2.99% pre-conference click through rate

7.469% conference engagement rate

pre-conference engagement rate

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155 participants 56 speakers 03 sponsors 2710 visitors to the conference website

425 matchmaking communications

44 1:1 meetings conducted

Matchmaking intentions

• A. e . Petsche Company

• AAFI

• Able industrial products

• ADD e V MAT e RIALS

• Aernnova

• Aeroasset

• Aerocharter

• Aerocluster de Querétaro

• Aeromexico

• A e RONODO, SAPI, S.A. D e C.V.

• Aeropilot

• Aeroprocess TTT

• Aeropuerto Intercontinental de Querétaro, SA de CV

• Aeropuerto Internacional Felipe Ángeles, S.A. de C.V.

• Aeropuertos y Servicios Auxiliares

• A e XA

• Air France KLM

• Air France KLM Cargo

• Airbus Americas, Inc

• Airbus SLC

• Airworthy, Inc.

• Allied Tool & Die

• Altair

• AMB e e ngineering

• AS e SA MRO, S.A D e C.V.

• Axon’ Cable

• Azul PR

• Brella Ltd

• Business Intelligence Group

• CBQ GLOBAL LLC

• CL e ANLAB SOLUTIONS

• Cluster Aeroespacial de Baja California

• COMC e - Mexican Business Council for Foreign Trade, Investment and Technology

• CONAC y T

• CONICSO S.A.S

• Consejo Aeroespacial de Jalisco A.C.

• Consultoría de Imagen Pública y Política

• CORPORATIVO ULTRA D e M e XICO

• Cramex Aerospace

• DB Schenker

• D eCS e F

• Delegacion general de Quebec en México

• Delta Air Lines

• DHS INT e RNATIONAL

• e mbajada de Bélgica/ AW e X México

• e mbajada de Hungría

• e mbassy of Belgium to Mexico

• e SCU e LA D e VU e LO CAP. OMAR TAPIA MARQU e Z

• Facultad de Medicina, UNAM

• FAM e X

• Fed e x e xpress México

• F e MIA

• FUM eC

• G100 Desarrollos

• G e Infrastructure Queretaro

• Gobierno de Ontario en México

• Grupo Prodensa

• grupo xenon

• GTO Automotive

• Helmut Fischer

• Horizontec SAPI de cv

• HT-MX Heat Treat & HIP

• IATA

• Infor

• Innocentro

• INNOVA 2 e L e VAT e

• Inxeniux Creative Technology

• IRS Technology

• ITA

• JeffreyGroup

• KAMAN A e ROSPAC e

• Kayak

• KPMG México

• Laser & Manufacturing

• Laserkasky

• LAVART e X

• Leach International Mexico

• LH Cargo / LCSLM

• M Aerospace RTC

• Makinovo

• MB

• MBN

• Metal Finishing

• Mexico Business

• N1 Capital

• Nitto Denko

• N y X

• Polymershapes

• PPG Aerospace

• Pragmatic

• Procesos Control Numérico Computarizado S.A. de C.V.

• PRO ee SA

• Quality Aeronautical e ngineering Consultants

• Questum

• R e R e nergy Group

• RX Global

• Safran

• Salem & Associates Aeronautical Consulting Group

• Secretaría de Desarrollo Sustentable del Poder ejecutivo del e stado de Querétaro

• S e D eCO e DOM e X

• S e D e SU

• SITA

• Soluciones Tecnológicas Térmicas Nitrex Querétaro

S De RL De CV

• SPAC e LAB

• SUMe, Sustentabilidad para México

• Swiss Business Hub

• TAR Aerolineas

• T e Connectivity

• Teague

• Techman-Head

• Tecnológico de Monterrey/ Nanotechnology and Devices Design Research Group, P.I.

• Tecnológico Nacional de México

• T e ST

• Thrusters Unlimited

• UAT FI-UNAM

• Universidad Aeronáutica en Querétaro

• Universidad Autónoma de Chihuahua

• UPMH

• Viva Air

• WASHT eCH S.A. de C.V.

• yuma e ngineering

09:00 ONE WAY TICKET TO THE FUTURE OF COMMERCIAL AVIATION

Moderator: José Ricardo Botelho, ALTA

Panelists: Félix Antelo, Viva Air Group

Giancarlo Mulinelli, Aeroméxico

Ricardo Bastón, TAR Aerolíneas

10:00 PASSENGER EXPERIENCE IN THE POST-COVID-19 ERA

Moderator: Alicia Arizpe, Mexico Business News

Panelists: Livier Bustos, Delta Airlines

Filipe Pereira, ALTA

Anthony Harcup, Teague

Lise Vives, Kayak en México

Guilhem Mallet, Air France KLM Group in Mexico

11:00 NETWORKING OPPORTUNITY

12:00 COMMERCIAL AIRPLANES: TECHNOLOGY TRENDS SHAPING TOMORROW’S VALUE PROPOSITION

Moderator: Abraham Sarraf, Airworthy

Panelists: Amanda Simpson, Airbus

José Enrique Román, Boeing Research and Technology

Maurilio Albanese Novaes Junior, embraer

13:00 TOWARDS MORE RESILIENT, DYNAMIC AEROSPACE SUPPLY CHAINS

Moderator: René Espinosa, FeMIA

Panelists: Alberto Robles, General electric Aviation

Roberto Corral, Innocentro

Eugenio Marín, FUM eC

Jatziri Barrios, Turboparts Specialists e TU-Aerospace

14:00 NETWORKING OPPORTUNITY

15:00 MEXICO’S ROLE IN THE AEROSPACE SUPPLY CHAIN OF TOMORROW

Moderator: Tomás Sibaja, Baja Aerospace Cluster

Panelists: Luis Carlos Ramírez, Chihuahua Aerospace Cluster

Claire Barnouin, Monterrey Aerospace Cluster

Antonio Velázquez, Queretaro Aerospace Cluster

Alejandro Arredondo, Bajio Aerospace Cluster

16:00 QUERETARO’S AEROSPACE COMPETITIVENESS

Speaker: Marco Antonio Del Prete, S eDeSU Queretaro

16:15 QUERETARO POTENTIAL AS AN AEROSPACE POWERHOUSE

Moderator: Carlos Robles, AMB e engineering LLC

Panelists: Enrique Sosa, UNAQ

Jorge Gutiérrez de Velasco, AIQ

Juan Carlos Corral, Queretaro Aerospace Cluster

Marco Antonio Del Prete, S eDeSU Queretaro

17:00 THE FUTURE OF FAMEX 2023

Speaker: Gen. Javier Sandoval Dueñas, FAM e X 2023

09:00 WHAT CAN THE AVIATION INDUSTRY EXPECT FROM FELIPE ÁNGELES INTERNATIONAL AIRPORT?

Speaker: Colonel Alain Reynaldo Solana Arévalo, AIFA

09:30 AIRLINES & AIRPORTS: SYNERGIES FOR GROWTH

Moderator: Carlos Campillo, Alegre, Calderón y Márquez Abogados SC

Panelists: Ricardo Dueñas, Grupo OMA

Jorge Gutiérrez de Velasco, AIQ

Gen. Isidro Pastor Román, AIFA

Mauricio Arellano Villavicencio, ASA

10:30 OPPORTUNITIES IN AN ERA OF CARGO DISRUPTIONS

Moderator: Frank Nozinsky, Lufthansa Cargo

Panelists: Jorge L. Torres, Fede x e xpress México

Guillaume Marsoin, Air France KLM Martinair Cargo

Luis Ramos, Aerocharter

Luis Sierra, MAS Air

11:30 NETWORKING OPPORTUNITY

12:30 HOW TO CAPITALIZE ON MEXICO’S MRO OPPORTUNITIES

Speaker: Jorge Vega Cleto, AS eSA MRO

13:00 HYDROGEN AIRCRAFT: THE NEXT STEP IN SUSTAINABILITY

Speaker: Damien Sternchuss, Airbus Latin America and the Caribbean

13:30 HALCÓN 2: AIRPLANE DESIGNED AND MANUFACTURED IN MEXICO

Speaker: Giovanni Angelucci, Horizontec

13:45 INSIDE STORY OF HALCÓN 2: FIRST MADE-IN-MEXICO AIRPLANE IN 70 YEARS

Moderator: Antonio Salem, Salem & Associates Aeronautical Consulting Group

Panelists: Humberto Montaño Valdez, Horizontec

Edgar Martínez Ortega, Horizontec

Rigoberto Sánchez Vivar, Horizontec

Giovanni Angelucci, Horizontec

14:30 NETWORKING OPPORTUNITY

15:00 ADVANCED AIR MOBILITY: A NEW FRONTIER IN AVIATION

Speaker: Antonio Campello, INNOVA 2 eLe VATe

15:30 AEROSPACE WORKFORCE OF THE FUTURE

Moderator: Enrique Sosa, UNAQ

Panelists: Salvador Landeros Ayala, Mexican Space Agency

Ana Molina, Airbus Helicopters México, Querétaro

Efraín Pérez, Safran

16:30 ADVANCED AIR MOBILITY: A NEW FRONTIER IN AVIATIONS

Speaker: Luis Gerardo Lizcano, FeMIA

ONE WAY TICKET TO THE FUTURE OF COMMERCIA L AVIATION

The pandemic brought challenges but also growth opportunities to the aerospace sector and, although Mexico’s aviation industry has seen a fast recovery from the COVID-19 pandemic, there are still numerous obstacles ahead, agreed industr y experts.

“Colombia-Mexico is the fastest growing region in the world. This is because both countries faced the pandemic the best possible way they could, considering that there was no government support”

Felix

Antelo

President

and CEO | Viva Air Group

While the slowdown in travel was widespread, the effects of the pandemic hit regions and airlines differently. For example, Viva Air Group experienced an unexpected growth in operations after the outbreak of the COVID-19. The airline now has 60 percent more passengers than it did before the sanitary crisis and was the only Colombian airline that did not file for Chapter 11 bankruptcy protection. In Sep. 2020, Viva Air restarted operations as an entirely different company, explained Felix Antelo, President and CeO, Viva Air Group. It now flies to 45 domestic destinations and 15 international ones. The fast recovery of Colombia’s aviation industry mirrors the one Mexico is experiencing.

“Colombia-Mexico is the fastest growing region in the world. This is because both countries faced the pandemic the best possible way they could, considering that there was no government support,” said Antelo. According to Ricardo Bastón, Chief executive Officer, TAR Aerolineas, in Mexico the lack of government support prompted the industry to work together during the crisis. For TAR, connectivity was essential in enduring the pandemic, said Bastón.

Aeromexico, for its part, reported an increase in revenue of 114.3 percent in 4Q21 versus 4Q20. Its passenger traffic, however, fell 4.8 percent in the period compared to

4Q20. The airline “will continue to expand operations safely in the coming months, in accordance with local regulations and customer demand and in full compliance with the highest standards and protocols,” said Aeroméxico in its 4Q 20 report.

Aside from the COVID-19 crisis, the Ukraine conflict is delaying the industry’s recovery by increasing fuel prices and hurting economies. These trends could further delay the sector’s recovery from the pandemic and change the future of commercial aviation.

“The world is reopening and traveling limitations are dropping; we will see a traveling boom,” said Antelo. In the future of aviation, Mexico will be an attractive destination despite the growing competition but high fuel prices and the shortage of qualified professionals could hamper the growth of the industry in Latin America. Consumers, on the other hand, are benefiting because it has never been less expensive to fly.

Giancarlo Mulinelli, Senior Vice President, Global Sales, Aeroméxico, forecasts a promising future for the region because Asians and europeans are increasing their visits to Latin America. “We are in a very unique position as a region to capture that traffic,” he said. Corporate traveling is also expected to bounce back and vaccine tourism will remain in the spotlight. In the future of commercial aviation, Aeroméxico “wants to develop economies, bring job opportunities and make a positive impact for everybody,” added Mulinelli.

For years, technology has been an important ally of the aviation industry, which can now help it recover and transform. “It has never been easier to interact with an airline,” said Antelo. Viva Air Group has taken advantage of the acceleration in digitalization amid the COVID-19 pandemic. The group launched a WhatsApp channel to offer its services, become more responsive and lower costs. After the pandemic, costumers are

increasingly demanding faster and simpler processes, which is why the airline heavily invested in a new website that has improved its services.

“Now customers like to fully have control and the pandemic has made people less tolerant,” said Mulinelli. To face this, Aeroméxico has invested in self-service tools and B2B platforms. It also improved its Club Premier program, bringing more benefits to users. The airline aims to continue innovating to simplify travel by putting its clients at the center.

While interconnection has brought several benefits for passengers, it also posed challenges to the industry, said Antelo. Regardless of the advantages that the connection that the online platforms offer, to build culture, people must interact with

each other, he added. For that reason, the airline was the first in Colombia to go back to the office and currently, it continues to advocate for a hybrid model. Furthermore, he warns that the transition to full digital models will lead to the loss of 15 to 20 percent of corporate traffic.

To increase traffic, airlines should also look to improving passenger experience and rely on technology to improve cost management. The use of biometrics will become widespread, with China and the Middle e ast already implementing them in their traveling processes, said Bastón. He also highlighted the importance of using sustainable aviation fuels (SAF) and emerging transportation alternatives. “Innovation is positive and, as an industry, we are all taking advantage of it,” said Bastón.

IMPROVING PASSENGER EXPERIENCE COULD DRIVE RECOVERY

COVID-19 lockdowns were some of the greatest challenges the aviation industry faced in modern history. Two years after the start of the pandemic, with vaccination rates increasing globally and travel restrictions slowly decreasing, the aviation industry is beginning to recover while it keeps adapting to the uncertainty that continues permeating the sector. Besides recovering the lost passenger traffic, airlines must also deal with more demanding customers, who are looking for expediency, comfort and safety.

After lockdowns and travel restrictions put the aviation industry on hold during 2020, the industry has recovered as restrictions ease and passengers are increasingly willing

“The airport or the airline is not the issue. The issue is the uncertainty during the entire process that begins when you start planning your trip. This is what creates anxiety before and during travel”

Anthony Harcup Senior Director of Airline Experience | Teague

to travel again. During 2021 aviation and tourism started to pick up but full recovery has been unequal between regions. To keep adapting to both uncertainty and higher user experience standards, airlines and airports have made their policies more flexible and have relied on technology to ease passengers’ fears and facilitate travel while keeping them protected.

Domestic travel within countries has shown the strongest recovery. During the past 18 months, the US Transportation Security Administration (TSA) reports that domestic travel has recovered and is approaching its pre-COVID levels. Delta Airlines, for example, expects to see a 90 percent recovery during 2022 for its US domestic leisure flights, said Livier Bustos, General Manager Mexico, Delta Airlines. However, corporate travel is a different story, with Delta reporting that these flights remain at only 50 percent from 2019 levels. Business travel is expected to start recovering at a faster pace after 2H22, as more workers head back to the office, which will eventually lead to the reactivation of business travel, sa id Bustos.

International flights are still reeling from the uncertainty caused by COVID-19 travel restrictions and the potential emergence of new COVID-19 variants and lockdowns. With vaccination rates and travel restrictions varying from country to country, passengers remain exposed to last-minute changes in their travel plans. “The airport or the airline is not the issue. The issue is the uncertainty during the entire process that begins when you start planning your trip. This is what creates anxiety before and during travel,” said Anthony Harcup, Senior Director of Airline e xperience, Teague. To adapt, regain trust in traveling and face volatility, Harcup suggests alliances with travel agencies, which offer comfort and reassurance to customers during unpredictable changes. Travel agencies are now being used by 33 percent of travelers.

Passengers’ changes in travel behavior can also bring opportunities for airlines. With business travel on hold, passengers who were used to traveling in business class are now looking for more comfort when traveling on their own. Airlines have seen a sharp rising demand for premium economy seats, making them consistently overbooked, notes Harcup. Some airlines, such as Air France-KLM, are using its

business capacity to create incentives for certain market segments that are currently not doing corporate travel, allowing potential flyers to use business class tickets for leisure travel, said Guilhem Mallet, General Manager, Air France-KLM Group in Mexico.

In the reactivation of international travel, governments play a crucial role. With diverse health policies and travel restrictions, mobility remains complex for international passengers, leading industry associations to approach governments to simplify and align these diverse requirements. For example, the International Air Transport Association (IATA) works with governments to convince them that the implementation of easier, simple and more aligned travel requirements that are integrated to global best practices will incentivize passengers to travel internationally again. “Dealing with health authorities was never at the center of the aviation industry operation until the pandemic. We had to learn their dynamics and drivers to collaborate together,” said Filipe Pereira, Regional Director, the Americas Airport, Passenger, Cargo and Security, IATA. Collaboration with governments remains key for the sector’s rea ctivation.

Policies implemented by airlines are crucial to their recovery as they can improve passenger experience throughout the entire process. “Removing most change fees in the face of unpredictable travel restrictions helps gain trust back from travelers,” said Bustos.

However, diverse policies and options increase complexity for passengers when planning their trips. “The pandemic pushed airlines to adapt and change their policies, making it hard for passengers to keep up. Now passengers have more responsibility than before to be very well informed, here is where developing technology to facilitate the process and understanding of options becomes relevant for air travel

to reactivate,” said Lise Vives, Country Manager, Kayak Mexico.

As the world begins to overcome COVID-19, the goal in the aviation industry is to get passengers to fly again, as it is essential for economic recovery. Restrictions and uncertainty may remain in the short term so both airlines and passengers will have to keep adapting to changing realities. As countries and regions cease restrictions for mobility and leisure, passengers will increasingly resume their travel plans. With the implementation of all the lessons learned in the past two years, increased flexibility, exceptional customer service and technology will help the aviation industry to recover.

SUSTAINABILITY, TECH, TALENT SHAPING COMMERCIAL AVIATION

Tech, supply chain continuity and sustainability are shaping aviation into a resilient, value-based industry. As they recover from the COVID-19 pandemic, commercial airlines are jumping into digitalization, sustainable practices and a self-sufficient supply chain for a long-term successful business.

Net-zero emission flights are one of the main objectives for commercial airlines, said Maurílio Albanese Novaes Júnior, Chief Technology Officer, embraer. The Brazilian O eM expects to achieve this goal by 2050 in line with the Paris Agreement to limit global warming to 1.5°C. “In this process,

the integration of novel technologies such as artificial intelligence (AI) will be fundamental to optimize the operations and processes and make the most of our resources and time,” said Novaes. AI, coupled with other technologies, will enable autonomous flights, air frames, hybrid processes and electric proportions, among other technologies, he added. “Autonomous flight technology will be an industry disruptor that will force us to reimagine the way we fly,” Novaes said.

“In the short term, AI will play a central role in increasing safety. However, initial applications should be monitored carefully

until we are 100 percent sure about the results of increased automation,” said Amanda Simpson, Vice President of Research and Technology, Airbus. But the process goes beyond operation. In manufacture, AI will determine sustainable processes but the human factor is responsible for correctly nourishing AI algorithms, she explained. “For the industry to feel comfortable and safe, we have to be aware of the data that will enable predictivity,” said Simpson.

Fleet renewal is another subject where AI can support companies in their journey to sustainability. Boeing, for example, is leading the fleet renewal trend as it aims to introduce more sustainable planes to reduce fuel usage and noise, said José e nrique Román, Vice President of Global Technology, Boeing Research and Technology. One of the company’s latest achievements in this regard was the largest purchase of sustainable aviation fuels (SAF) for commercial airplanes, which is an immediate solution that will help achieve the industry’s long-term commitment to net-zero carbon emissions by 2050.

“In the short term, AI will play a central role in increasing safety. However, initial applications should be monitored carefully until we are 100 percent sure about the results of increased automation”

Amanda Simpson Vice President of Research and Technology | Airbus

“But beyond this change, as long as we integrate tech, more benefits will permeate operations and traffic management systems for these fleets, which will optimize fuel use by creating direct routings and help customers optimize planning,” said Román.

Boeing achieved net-zero manufacturing processes and worksites in 2020 by expanding conservation and renewable energy use, while tapping responsible offsets for greenhouse gas emission management, as previously reported

by MBN. The company also committed to deliver commercial airplanes that are capable of flying using 100-percent SAFs by 2030.

Changes in the aerospace industry take between 10 and 15 years to be used in commercial aviation, according to Simpson. For that reason, companies are already late to introduce their modifications to achieve the 2050 net-zero goals. “And in this process, we need to, as an industry, have clear long-term future plans. What do we want the next aviation generation to look like? Because these goals will change our supply chains,” Simpson said.

For instance, Airbus made it a priority to reach net-zero emission flights in part through its initiative ZeROe, which involves the launch of the world’s first zero-emission, hydrogen-powered commercial aircraft by 2035. But to be able to successfully implement this measure globally, “we need to have the necessary infrastructure. Thus, airports have to offer the right conditions for these operations and for the clean energy flights we aim to implement in the future,” said Simpson. The O e M is also studying solar-powered flights, which could be done using advanced photovoltaic solar panels. These panels are lighter, more flexible and capable of capturing more energy per square meter while harnessing solar energy into a rechargeable energy storage system.

Talent shortages are another urgent subject to address for this industry. “Our careers are no longer attractive and as an industry, we need to join forces to continue bringing STeM to the educational system at an early stage,” Román said. But to efficiently invest in the development of human capital, the industry “needs to be more human and work ethically to promote teamwork and make this industry attractive. This is an investment in humans beyond math and physics,” said Novaes.

While the strategies are both numerous and diverse, the best way to tackle industry challenges is an “all the above” adoption

process, said Román. “Tech, sustainability, collaboration and human talent all matter equally. We have to prioritize all these areas to overcome the impact of the pandemic while avoiding a sustainability crisis,” Román said.

Sustainability, net-zero flights and other megatrends will continue to disrupt

the aerospace sector. Nonetheless, “we need to face these disruptions with the mindset of possible opportunities to design and change the way we fly, as well as to collaborate to grow together and contribute to our passengers and the environment,” said Abraham Sarraf, Vice President Sales and Business Development, Airworthy.

TOWARDS MORE RESILIENT, DYNAMIC AEROSPACE SUPPLY CHAINS

COVID-19 came to shake well-established supply chains and the Ukraine-Russia conflict further complicated the logistics sector, affecting numerous manufacturing industries including aerospace. To face this situation, adaptability is key to a dynamic and resilient supply chain that can keep the sector moving forward. But, the only way to build these resilient, adaptive supply chains is through collaboration, agree industry experts.

Aerospace clusters in Mexico and abroad are playing an essential role in boosting the recovery of the aerospace industry. Clusters around the world have supported manufacturers, helping them to integrate within supply chains. Academia, O e Ms and Tier 1 companies have also been allies during this process, leading players to tackle challenges through joint ventures. One of the key factors that have boosted the role of clusters is communication, which will also be essential for future growth in Mexico.

“Communication and integration of domestic clusters will be a revolutionary practice for Mexico’s aviation sector,” said eugenio Marín, CeO, FUMeC.

“Creating a resilient supply chain is like acquiring an insurance policy: it represents a cost but it is better to have it and not need it than to need it and not have it”

Carlos Robles President and Head of Aerospace

| AMBE Engineering LLC

Clusters are taking an even more important role in Mexico’s aerospace industry, according

to Marín. In previous times, clusters were not as fast to cooperate with each other, which reduced the value they brought to the supply chain. Now, clusters are working together to get and train talent to remain prepared for the demands of foreign companies that want to invest in Mexico.

Collaboration is the name of the game, said Alberto Robles, Strategic Supply Chain Manager, General electric Aviation. In the past, aerospace was not considered to be essential so the sector focused on lobbying to advocate for the industry. Through more strategic partnerships among industry clusters and FeMIA, the industry is gradually removing the obstacles to help the industry keep moving forward. “We need to work closer with our allies. We are competing with emerging regions in the world and we ought to start looking for opportunities,” said Robles.

Meanwhile, more aggressive strategies are being implemented while supply chains are being diversified to avoid shortages. Moreover, some companies are starting to incorporate new materials and rely more on technology. “We are busier now, have good financial planning and we have shifted to digitalization,” said Roberto Corral, President, Innocentro. For the acceleration of adaptability, technology was crucial. This has been a huge leap for companies, which are now pouring investment into tech, said Marín.

The experience of all actors during the pandemic varied widely, as did their adaptation strategies. Innocentro, for example, became a hybrid company to

have a broader reach while keeping in touch with employees. During this period, the company also embraced new work models that allowed employees to increase productivity and satisfaction. “Becoming a hybrid company helped our team stay motivated and continue posting brilliant results. We thought that if the company helped its employees work better from home, this work model could turn into an asset,” said Corral.

Small and medium-sized enterprises (SMes) underwent a more challenging process. SM e s faced a disproportionate challenge in adapting their processes and only those that have moved with agility have survived. “SM e s underwent quite a journey. It is important to recognize those who thrived through this period of uncertainty. We did not know what was coming or how long it would take to pass. As a manufacturing company, the recovery has come with a lot of challenges such as the political global context,” said Jatziri Barrios, Director Turboparts Specialists, e TU-Aerospace.

Although the sector is recovering, companies must implement strategies to build more resilient supply chains that can handle future shocks. Supply chains must be prepared to endure highly disruptive events

and quickly recover. “Creating a resilient supply chain is like acquiring an insurance policy: it represents a cost but it is better to have it and not need it than to need it and not have it,” said Robles.

Transparency and information sharing throughout the supply chain are immediate actions companies can implement to mitigate hidden risks. They should also diversify their supply portfolio, create and protect supply networks and develop business continuity plans. Moreover, organizations must be immersed in forecasting and consider all the upcoming challenges. “What if?” questions should be answered to avert catastrophic outcomes. Mexico, in particular, must start investing in advanced manufacturing. “We must look at the future and work towards that,” said Robles.

As the COVID-19 havoc is not over yet, the sector must be prepared. “The pandemic is not over; we need to be ready for another outbreak. Moreover, the Ukraine war has destabilized operations. Mexico needs to be ready and develop its capabilities. The country has an opportunity to join the big leagues if we work together to close gaps and invest in innovation and technology,” said Barrios.

MEXICO TO CONSOLIDATE ITS ROLE IN THE SUPPLY CHAIN O F TOMORROW

International supply chains have been challenged by raw material shortages, logistics delays and reduced capacity due to

COVID-19. The aerospace supply chain is no exception. As the global economy recovers from the shock of the pandemic, supply

chains in all industries are rebuilding. Mexico is in an interesting position in the international aerospace supply chain and consolidating it could bring further economic growth, social development and technological innovation. To do so, Mexico needs to tackle certain challenges.

To improve its competitiveness in the aerospace supply chain, Mexico first needs to strengthen its transportation infrastructure, said Antonio Velázquez, Managing Director, Queretaro Aerospace Cluster. Beyond infrastructure and multimodal transportation, the country also needs a reliable supply of energy and water, adds Velázquez.

“Technology is a powerful enabler for economic development. When a country has its own capabilities to develop its own technology it has the possibility to remain competitive internationally”

Antonio Velázquez Managing Director | Queretaro Aerospace Cluster

Other challenges to tackle include cybersecurity breaches and bottlenecks and delays in ports, said Luis Carlos Ramírez, President, Chihuahua Aerospace Cluster. Likewise, Mexico has yet to improve its capital flow within the supply chain. If the circle of capital becomes more agile through the right support and incentives, the entire sector will benefit, said Ramírez.

Citing insights from the World economic Forum (W e F), Ramírez highlights that “supply chains are much more than systems, structures and technology, they are also people, whose safety and wellbeing must be upheld.” The COVID-19 pandemic is a reminder of the importance of human capital throughout industrial activity. Therefore, to improve competitiveness, the human factor must be prioritized. “We need to go back to basics and teach innovation culture from the early stages in education to give our future professional workforce the needed skills for the technological advancement the industry

will need and encourage youth to pursue ST e M careers, which will nurture Mexico’s competitiveness in strategic industries,” said Ramírez.

“Specialized human resources are fundamental. Those involved in the supply chain need a specific skill set and research capabilities that can ignite and foster innovation,” said Velázquez. Likewise, “investing in talent and training of the skilled workforce is what Mexico should be doing if it wants to keep its position in the index of global players in the aerospace industry,” said Claire Barnouin, e xecutive Director, Monterrey Aerocluster. Human capital and talent nurturing will intrinsically shape the future of innovation and competitiveness. “If Mexico wants to be taken seriously in the global arena, we need a strong commitment at the national level to train our workforce. Without talent there is no industry,” said Barnouin.

Mexico has unique opportunities for growth and is increasingly becoming more attractive both in manufacturing and supplying the afterparts and repairs services the aerospace industry demands.

“Services is an area where Mexico could grow competitively,” said Tomás Sibaja, President, Baja California Aerospace Cluster.

One of Mexico’s pending accounts is the local development of national technology. “Technology is a powerful enabler for economic development. When a country has its own capabilities to develop its own technology it has the possibility to remain competitive internationally,” said Velázquez. Technological innovation also creates a waterfall effect throughout entire value chains. When a company implements new technology, businesses throughout the entire supply chain benefit, improving efficiency and competitiveness.

However, Mexico is not known for being a technology producer country; it is known as a technology consumer country. Mexico’s condition as a technology consumer country is unlikely to change in the short

term. To boost the aerospace supply chain in Mexico, investment and collaboration to produce inhouse innovation is key. The country also needs to implement strategies that allow for the fast incorporation of innovation into industrial processes and procedures. “The tricky part is how to get traditional manufacture companies, most from which are family-owned SM e s to understand the added value they could get from digitizing their operation, as opposed to following traditional methods,” said Barnouin.

To achieve the leap forward, Mexico needs local technological production generated through the joint efforts of the government, companies, academic institutions and R&D centers. In this scenario, the government needs to lead innovation efforts and support companies that are committed to local R&D, said Alejandro Arredondo, Managing Director, Bajío Aerospace Cluster. Meanwhile, academic institutions need to adapt quickly to form the required human talent for new technologies. “In Mexico, better collaboration between the government and the private sector is required to achieve a better understanding

of what companies need to improve to favor national competitiveness,” said Arredondo.

Mexico has a privileged geographical location that allows it to position itself as a node for global commerce and supply chain distribution. It also has competitive and capable talent that can perform high-quality work and boost economic growth. However, to boost competitiveness of its national suppliers, public policies and a coordinated government strategy are essential. “Mexico has not asked for anything in exchange from the foreign companies that arrive in the country. Landing is very easy. We need to start asking those companies for local industry development in return to catch up,” said Arredondo.

“We need a national policy and strategy to grow the local aerospace industry and provide the commercial and business environment to capitalize on our talent and increase our competitiveness,” said Barnouin. With a national guideline and united efforts between sectors and stakeholders, Mexico will achieve its full potential and consolidate itself as an international reference in the aerospace industry.

Queretaro’s aerospace industry keeps growing despite challenges, with the state playing a crucial role in the national and international supply chains. Thanks to its labor force, universities and ideal location, the state has the potential to take a more prominent role in the aerospace industry.

Between 1999 and 2021, Queretaro received the most foreign direct investment (FDI) for

the aerospace industry in Mexico, for a total of US$981 million. Queretaro’s numerous aerospace companies manufacture aerostructures, complex components of aerostructures, landing gear, engines and composite materials. Furthermore, the state has capabilities for special treatments and processes.

“We have equipped technical and technological universities in the state, including Universidad Politécnica de Querétaro (UPQ), Universidad Tecnológica de Querétaro (UTEQ) and Universidad Tecnológica de San Juan del Río (UTSJR)”

Marco Antonio del Prete Minister of Sustainable Development | SEDESU Queretaro

Queretaro’s geographic location, near the ports of Manzanillo and Lazaro Cardenas, has been essential to its success in the aerospace sector, said Marco Antonio del Prete Tercero, Minister of Sustainable Development of Queretaro (S eD e SU). The state is also centric and well connected to other strategic industrial states such as San Luis Potosi, Irapuato, Leon, Guadalajara and Puebla. However, Queretaro’s main asset is its talent, which is the result of the industry’s strong collaboration with academia and R& D centers.

Queretaro’s main strength lies in its education system, which has received support from both the industry and the local government, said del Prete. “We have equipped technical and technological universities in the state, including Universidad Politécnica de Querétaro (UPQ), Universidad Tecnológica de Querétaro (UT e Q) and Universidad Tecnológica de San Juan del Río (UTSJR).”

The state also hosts Mexico’s only aeronautical university: Universinad Aeronáutica en Querétaro (UNAQ). UNAQ’s graduates usually work for multinational aerospace companies established in the state, which include Bombardier,

eurocopter, Aernnova, Tremec, ITP, Grupo Safran and TechOps. The university is leading numerous aerospace projects, including some for the development of unmanned aerial vehicles (UAV) and composite materials, the latter alongside S e D e NA. Other projects include flight simulators for pilot training, developed with the Mexican Air Force and a femtosatellite built with MxSpace through Thumbsat. The university also performed research on nano, micro and picosatellites, launchers and navigation systems with the Mexican Space Age ncy (A eM).

UNAQ recently reached an agreement with Bombardier Aerospace for a fast-track training program for the manufacture of harnesses for their aircraft. UNAQ is the only university in Mexico that focuses completely on aerospace studies.

These strengths have helped make the state competitive. “We receive a superior investment amount compared to the major municipalities in Mexico. We have the top grade on the national scale of stable perspectives. We were awarded fifth place in the “Global Cities of the Future with Overall e conomic Potential 2021-2022” and we are the second most attractive state for investment in Mexico,” explained del Prete. Additionally, Queretaro has no public debt and has the healthiest finances, he added. It is also the third most competitive in Mexico.

In the aerospace industry, Queretaro is home to two O e Ms, 26 Tier 1 and Tier 2 suppliers, five MROs, 19 general services companies, 12 research centers, four raw material suppliers and seven academic institutions, being in eight place among cities with the best FDI performance for the aerospa ce sector.

“Queretaro has experienced a 200 percent growth in aerospace companies since 2006. Most companies focus on manufacturing (72 percent), followed by R&D (13 percent) and maintenance and repair (11 percent),” said del Prete.

QUERETARO: AN AEROSPACE POWERHOUSE

Queretaro’s aerospace industry has been growing steadily during the past ten years, gaining relevance in Mexico and abroad. The state has become a key destination for foreign direct investment (FDI) thanks to the conditions the state offered to entrepreneurs in the aerospace sector, agree experts.

“The latter means that the state needs to develop more infrastructure, more capacity to broaden the panorama of investment and offer more competitive, trained professionals for the companies that need it”

Enrique Sosa Dean | UNAQ

Among its strengths, Queretaro has highly qualified personnel at various technical and professional levels thanks to its numerous universities and training centers, which include Mexico’s only aeronautical university, Universidad Aeronáutica en Querétaro (UNAQ). “Talent is one of the state’s long-term strengths,” said enrique Sosa, Dean, UNAQ. “Thus, we need to focus on developing more human capital and build new skills to attract more processes in line with the needs of the sector.” Nonetheless, Queretaro still has a gap to close regarding gender equality. Few women are entering this field, so “we need to break gender roles to encourage their participation,” said Sosa.

The state also provides continued political stability that led to the development of a six-year strategy to support the aerospace industry and others. The sector is now focusing on developing numerous technologies, including high power electronics, propulsion systems, satellites and the space industry. “The latter means that the state needs to develop more infrastructure, more capacity to broaden the panorama of investment and offer more competitive, trained professionals for the companies that need it,” said Sosa.

R&D could be strengthened as a result of more investment in talent and infrastructure, supported by the triple helix and other players. “[Queretaro] has excelled thanks to the joint work from academia, the private sector and government, but other actors could play a role,” said Jorge Gutiérrez de Velasco, Airport Manager, AIQ. The state’s industries and economy could benefit from incorporating these other players into the triple helix.

“Society and sustainability need to join the helix if we are working toward the netzero emissions goal for 2050,” said Marco del Prete Tercero, Queretaro’s Minister of Sustainable Development. The state’s government is building bridges to facilitate the work of the helix, said del Petre: “We have implemented a close relationship with groups from the organized society and we wish to integrate them to continue growing in line with environmental and development goals.”

Industrial parks and Queretaro´s strategic location are fundamental for the state’s success in the aerospace sector. “These characteristics have allowed for the arrival of key players like Bombardier, Ge or Safran, which improved the capacity of our local supply chain,” said Juan Carlos Corral, President, Queretaro Aerospace Cluster.

The state, however, has a pending task in increasing the inclusion of local manufacturing companies into the supply chains of these international players. Supply chains could be strengthened if international players manufacturing in the state would purchase 10 percent of their materials locally, which would also increase “the need for more power and energy, which could be sourced through startups and financial agencies,” said Corral.

Queretaro’s aerospace industry is increasingly expanding its capabilities. For example, it is strengthening its activities in defense and space manufacture and moving

toward maintenance-oriented models, which have to be offered in the state’s educational centers to train more people in this field, said del Prete. “The government also wants the state to enter the space industry. With the democratization of space, this is an opportunity that goes beyond satellites. We want a Latin American and Caribbean Space Agency (ALCe ) office in Queretaro,” said del Prete. To do so, the government has been working with the Ministry of Foreign Affairs (SR e ) to create an office of ALC e in the state.

Thanks to the aerospace industry, Queretaro has seen job creation, economic growth

and technology transfer. Automotive company Vuhl, for example, used aerospace technology to develop one high-tech vehicle “and this is just one example of how much we could support other industries such as pharmaceuticals, information technologies, and so on,” said Carlos Robles, President & Head of Aerospace, AMBe engineering LLC.

“Countries that work in the aerospace industry train specialized workers, generate more tech and technology transfer and develop an advanced ecosystem, among other benefits. We do not work for the industry, we have this industry as part of our development strategy,” said Corral.

FAMEX 2023 WILL WELCOME FRANCE AS THE GUEST OF HONOR

Considering the challenging environment Mexico’s aerospace sector faces, the Mexican Aerospace Fair (FAM e X)aims to support Mexico’s economic development through the aerospace sector, attract Foreign Direct Investment (FDI), generate jobs and train future employees. This worldclass aeronautical, security and defense event is organized by S e D e NA through the Mexican Air Force and supported by the three levels of government, as well as public, private, academic and business organizations.

“FAMEX is supporting the continued advance of Mexico’s aerospace and adjacent industries by connecting companies, talent and providing a space for them to showcase their projects and services”

General Javier

FAM e X is an important actor in the development of the local aerospace sector and is a member of the Mexican Federation of the Aerospace Industry (F e MIA), the Mexican Council of Aerospace education (COM e A), the Consulting Council of the Aerospace Industry of the Ministry of e conomy (CCIA) and the College of Mexican Aerospace e nginee rs (CIMA).

Sandoval Dueñas President |

FAMEX 2023

“FAM e X is supporting the continued advance of Mexico’s aerospace and adjacent industries by connecting companies, talent and providing a space for them to showcase their projects and services,” said General Javier Sandoval Dueñas, Presid ent, FAM e X

The event’s main objectives are to preserve and guarantee national and internal security and to strengthen the Mexican Army and Air Force, according to the National Defense Sectorial Program 2020-2024. FAM e X also aims to position itself as the main promoter of the aerospace industry in Latin America, supporting economic development, FDI attraction and academic and defense investment. Moreover, FAM e X seeks to reinforce military-civilian relationships through communication, transparency and respect and increase civilian thrust in Mexico’s Arm ed Forces.

FAM e X was created in 2014. At the time, the Consultative Council of the Aerospace Industry did not exist, Fe MIA had just over 40 members and COM e A did not have the proper promotion. Consequently, S eD eNA ought to organize FAM e X on its own. In the 2015 edition, FAM e X had less companies

participating than the fairs of Chile and Brazil. In 2017, FAM e X surpassed Brazil in expositors and in 2019 it surpassed Chile and was recognized as the most important aerospace fair in Lati n America.

In 2018, the event improved thanks to the interest of the current administration in promoting the sector. Owing to this, FAMeX 2021 attracted 317 companies, 129,800 attendants and 47 countries, with France as the guest of honor. The event also hosted 4,200 B2B meetings and 62 exhibition aircraft. On the other hand, Brazil and Chile canceled their aerospace fairs that year. “Maintaining and advancing FAM e X’s objectives despite the detrimental disruption of the COVID-19 pandemic speaks to the potential and expected growth of Mexico’s aerospace sector,” said General Sandoval.

For the 2023 edition, FAM e X will offer cultural events, networking cocktails, aerospace shows and inaugural and closure ceremonies. It will also include a digital platform for enterprises to have B2B networking opportunities. Seminaries and forums will be offered. The upcoming FAMeX event will be held in the new Santa Lucia’s facilities with six exposition pavilions for the aeronautics, aerospace, defense, 4.0 Industry

and education sectors. The participation of academia has been essential for the Mexican industry, generating excellent up-to-date academic programs that serve the changing needs of the industry. FAM e X also aims to be a platform where young researchers can promote their projects.

“For 2023, FAM e X aims to innovate in several areas of opportunity. Regarding academia, for example, we want to strengthen the participation of public and private national and international universities,” said General Sandoval.

During FAM e X 2023, the space sector will take a more prominent role compared with prior editions. Space agencies from Mexico, France and the US are interested in meeting to exchange experiences and update collaboration agreements at governmental levels. Moreover, France recognizes the quality of Mexican talent and dares to design and manufacture key original equipment parts in the Latin American country. France is Mexico’s main aerospace investor and has an important impact in the country’s economy and job creation. The guest of honor modality started in the 2019 edition with Canada, while in 2021, the US was the guest of honor, as reported by MBN AIFA OFFERS MUCH MORE

THAN EXPECTED

The airport system in the Valley of Mexico has operated above capacity for almost 30 years. The Felipe Ángeles International Airport (AIFA) was built to counteract this saturation and complement the metropolitan airport system, composed of Mexico City International Airport (AICM) and Toluca Internationa l Airport.

AICM has been saturated since 1994, as estimated by the Ministry of Infrastructure, Communications and Transportation (SICT) in accordance with the National Airport Law. Considering that AICM is the most important airport terminal in the country, this saturation poses a pressing problem for all airlines and passengers that use it. Under these circumstances,

“AIFA seeks to make operations safer for passengers and avoid airline expenses due to delays generated by airport saturation in Mexico City,” said Colonel Alain Reynaldo Solana Arévalo, Deputy General Operational Direc tor, AIFA.

The airport was one of President Andrés Manuel López Obrador campaign promises and began construction on Oct. 17, 2019, in the Santa Lucía military base, State of Mexico, under the responsibility of the Mexican Army Corps of e ngineers. Its first construction phase was completed in 2.5 years and inaugurated on March 21, 2022.

AIFA has a 273,339 m2 terminal building, with an operating capacity of 19.5 million

passengers per year. Its aeronautical infrastructure consists of two 4.5 km parallel runways of hydraulic concrete, suitable for landing any type of aircraft. In addition, AIFA has a cargo and customs terminal for merchandise transportation, with a capacity of up to 3 million tons per year.

Since its inauguration, AIFA has carried out 449 operations: 224 departures and 225 arrivals, mobilizing 46,052 passengers. At the moment, only four airlines operate at AIFA: Aeroméxico, Volaris, Viva Aerobus and the Venezuelan airline Conviasa. “We had a slow start; we are working to boost the airport and grow gradually,” said Colonel Solana. AIFA also offers general aviation operations, hosting a total of 40 operations carrying 74 passengers.

“AIFA is a sui generis airport… It has a great infrastructure for general aviation and for domestic and international cargo. However, what distinguishes this airport is that it also has spaces for entertainment and business,” said Colonel Solana. AIFA’s surroundings are equipped with hotels, shopping malls and spaces for cultural activities that seek to take advantage of the airport’s infrastructure to generate a larger economic spillover and incentivize businesses.

AIFA also has its own fuel farm, a series of storage tanks buried underground,

with a capacity of 21 million liters of turbo fuel. The airport’s infrastructure allows direct fueling through a subway pipeline, shortening refueling time and increasing operational safety. To increase security and competitiveness, AIFA’s facilities have also been equipped with the latest technology available, decreasing user waiting times and improving comfort.

Passenger processing is done either at the counter or through a virtual check-in using a mobile app. Then baggage documentation is done through a drop-off, shortening the passenger’s journey to the final departure lounge by about 15 minutes. AIFA also maintains the safety measures to prevent COVID-19 infections through its touchless and paperless passenger processing system, which is also adapted for the use of electronic passports. “According to IATA, the technology implemented at AIFA for passenger processing makes the airport 74 percent faster, 61 percent more intuitive, 50 percent more secure and [the experience] 72 percent more satisfactory,” said Colonel Solana.

AIFA also offers airlines competitive costs in comparison to other airports in the area, said Colonel Solana. According to the Ministry of Finance (SHCP), AIFA’s fares are 13 percent lower on average than those of AICM, some are up to 25 percent

less expensive. This represents a great incentive for airlines to operate in AIFA.

One of the largest criticisms AIFA received at the time of its inauguration was the lack of road connectivity that made it harder for passengers to travel to the airport. However, land connective has been expanded to facilitate access to the new airport, said Colonel Solana. These infrastructure works include improvements to the Mexico-Pachuca Highway and the State of Mexico e xterior Beltway. Moreover, several private companies now offer transportation to AIFA from different key points in Mexico City at a maximum cost of MX$150 (US$7.30). Departure points include Perisur Mall, Santa Fe Mall,

Mundo e Mall, the National Auditorium, the World Trade Center building, intermodal stations Indios Verdes and Ciudad Azteca and the AICM. Also, the State of Mexico offers an articulated transportation system to AIFA for MX$18 (US$0.88).

“We are strongly committed to the satisfaction of our passengers and airlines that work with us; we are constantly seeking to improve,” said Colonel Solana. AIFA has barely been operating for one month and its operators are continuously working to consolidate the airport’s position. “We are analyzing our areas of opportunity to keep improving and make AIFA an airport of quality, warmth and efficiency that will drive Mexico ’s growth.

AIRLINE, AIRPORT SYNERGIES LEAD TO GROWTH

For the past two years, Mexico’s aerospace and aviation sectors have focused on recovering activity flows and economic stability after the COVID-19 pandemic. Now, the industry has shifted its goals and is also striving to advance its sustainability plans and improve passenger experience to continue to be one of the main means of transportation for both passenger and cargo. Airlines and airports are two of the main points on which the development of the Mexican aerospace industry hinges.

Sustained efforts on traffic recovery have shown new industry trends regarding passenger behavior. “We used to have 23 million passengers on domestic and

business traffic and, while the first segment is back up, the second has taken the longest to recover,” said Ricardo Dueñas, Director General, Grupo OMA.

“Trips to visit family and friends and tourism travel have been the fastest areas to recover. We saw the first indicators in 2020 but industrial business flights did not take off until 2022. Just recently, Grupo OMA experienced a 90 percent growth in this type of flights, but this occurred two years after the COVID-19 outbreak,” said Dueñas.

Passenger behaviors also changed hygiene measures and airport practices regarding in-person contact between clients and staff,

which led to the adoption of measures to best fit the passengers’ needs, Dueñas explained. These measures also respond to the sector’s long-time goal to increase air travel in Mexico, an objective that has been greatly advanced by the country’s ultra-low-cost airlines. These airlines have greatly boosted local tourism to the point that they are now being recognized internationally for their achievements in the sector. “As Mexico’s middle class grows and the population pyramid has more people old enough to travel, these passenger flows are expected to grow. And so will airport capacity,” said Dueñas.

“The COVID-19 pandemic drastically shifted freight traffic. E-commerce became a main source of product acquisition and this changed supply chain”

Jorge Gutiérrez de Velasco Director General | AIQ

The increase in traffic is increasing pressure in the already oversaturated Mexico City International Airport (AICM). This airport’s oversaturation was one of the main reasons behind the construction of Mexico City’s new airport: Felipe Ángeles International Airport (AIFA). While new, the airport “is trying to work jointly with airlines through incentives that keep fares low and increase airport accessibility,” said Coronel Alain Solana, Operations Deputy General Manager, AIFA. To avoid traffic disruptions, AIFA aims to offer the right domestic connections that reduce travel time and provide greater security to operators.

To achieve the right operation and management, investment is fundamental. “Grupo OMA, for example, is investing to decentralize traffic and make the airport in Monterrey a hub to avoid forced layovers in the center of the country,” Dueñas said.

The National Metrology Center (C e NAM) has been implementing a metropolitan airspace modernization project that aims

to improve the area’s operation capabilities by 50 percent. “For airports such as the Queretaro Intercontinental Airport (AIQ), this measure aims to increase their capacity from 32 flights per hour to 48 per hour,” said Jorge Gutiérrez de Velasco, Director General, AIQ.

Improving traffic at the metropolitan area will also require investing in novel industry trends such as ambulatory flights, special airport wings for low-cost airlines and the adoption of tech to have less interaction between passengers and to provide a more direct travel experience. Infrastructure wise, investment in runways, platforms and pavements for the new generation of aircraft are among the top priorities.

Air cargo is another significant attractor of investment and cooperation between airlines and airports. “The COVID-19 pandemic drastically shifted freight traffic. e -commerce became a main source of product acquisition and this changed supply chains,” said Gutiérrez. AIQ saw its best year for cargo in 2021 and this year, the airport has been growing for five months in a row.

But growth and reconfiguration also implies securing fuel sources. The fuel provider of choice in Mexico is the Network of Airports and Auxiliary Services (ASA Network), which is currently prioritizing five of the large airports of its network. These include Puebla, where cargo in 2022 experienced a 280 percent growth compared to the same period last year. Puerto e scondido, Tepic, Colima and Ciudad del Carmen are also working to improve aircraft processing capacity.

ASA is working with Grupo OMA, AIFA and AIQ to review their fuel systems. “With OMA, we are looking to extend the hydrant network for a better volume capacity in the airport in Monterrey. AIQ has grown significantly so we have to improve its fuel storage capacity,” said Mauricio Arellano Villavicencio, Director of the Fuels Division, ASA. The growth of these airports has driven ASA to acquire fuel supply vehicles

to align to airport requirements and the operational reality of th e country.

A common concern for all airports in the country is sustainability but newer airports such as AIFA have an advantage as they were built with clean energy in mind. “We have solar farms and cogeneration plants that reduce emissions,” said Coronel Solana. AIQ is also investing in sustainability and aims to reduce its carbon footprint through solar energy farms and wind energy. “The longterm vision of AIQ is to always coexist with the environment,” said Gutiérrez.

Both airports and airlines have to align their needs and processes to respond correctly to changes in the industry. “The big task we have as an industry is to democratize flights. Mexico has one the most sophisticated fleet of luxury buses in the world, which has inhibited the penetration of our services,” said Carlos Campillo, Partner, Alegre, Calderón & Márquez Abogados SC. However, “if the aviation industry continues to excel in passenger experience and operation management, we could continue strengthening the aviation industry.”

OPPORTUNITIES IN AN ERA OF CARGO DISRUPTIONS

The Russia-Ukraine conflict and the COVID-19 pandemic continue impacting global air cargo, which is also tackling rising fuel prices, economic sanctions and no-flight zones. These trends affected numerous markets by increasing service costs and delaying deliveries at a time when e-commerce skyrocketed, increasing the need for faster deliveries. Under these circumstances, companies have been forced to adapt to give continuity to their operations and keep up with the growing demand.

“We had never had a shipping crisis like this one. Fuel prices are increasing as a global pandemic shrank air freight capacity

by 80 percent,” said Luis Ramos, C e O, Aerocharter.

The cargo sector is still affected by the global context but the COVID-19 outbreak allowed the sector to become more relevant to the economy. To face the sanitary crisis, air freight became crucial as it allowed countries to receive and send medical supplies, forced many companies to get certified for the transportation of pharmaceutical products and turn their passenger fleet into cargo aircraft. During the pandemic, “cargo transportation was globally considered an essential activity for the continuity of economic activities and most importantly for the lives of people,”

said Jorge L. Torres, Vice President, Fede x e xpress Mexico.

Airlines were not prepared for this crisis. “Supply chain disruption forced companies to reconfigure their cargo fleets, as travel demand lagged,” said Luis Sierra, C e O, MAS Air. Before the pandemic, MAS Air was implementing a five-year strategic plan but as COVID-19 hit, its operations were destabilized and focused on maintaining their operations. Fortunately, the brand is overcoming the obstacles posed by the pandemic and is currently celebrating its 30th anniversary, said Sierra.

“Cargo transportation was globally considered an essential activity for the continuity of economic activities and most importantly for the lives of people”

Jorge L. Torres Vice President | FedEx Express Mexico

Although COVID-19 heavily impacted air cargo companies, opportunities also arose due to the lack of containers for maritime transportation. “The shortage of shipping containers is an opportunity for airlines to demonstrate the potential of air freight, which is being increasingly recognized,” said Guillaume Marsoin, Director Mexico and Central America, Air France-KLM Martinair Cargo. This is linked to the fact that during the COVID-19 recovery phase there has been an increase in rates, a change in the flow of goods, fewer operational vessels and congested ports. even though this situation benefits the industry because clients are looking for more transportation options, air freight companies have to deal with the challenge of prioritizing what products should be

given priority depending on their relevance o r urgency.

For air cargo to succeed in overcoming these challenges, the public sector must participate in the process and embrace digitization and automation. In Mexico, cargo transportation can be delayed by the overreliance on physical requirements and permits, which could be digitized to the convenience of regulators and companies. Moreover, the excessive use of paper hinders the industry’s sustainability efforts. For that reason, the sector could benefit from the implementation of the cargo processes used in the US and the eU. “Processes and other standards of operations need to be revised, as many lead to time and monetary losses,” said Frank Nozinsky, Director, Sales and Handling Mexico, Lufthansa Cargo.

The e-commerce boom is putting further pressure in the cargo industry. “e-commerce is booming, accelerated by the pandemic. This has made customers even more anxious to get their products in days, if not hours, so we are anticipating that the sector will become even faster,” said Nozinsky to MBN.

In Mexico, e-commerce grew by 81 percent during 2021 and plays an important role in exports, which are a large part of the country’s GDP. As sales increase, the sector needs streamlined processes and regulations that facilitate the transportation of goods across borders. “Regulations must adapt and so that customer experience improves and transparency is promoted,” added Ramos.

The air cargo sector is undergoing a transformation. “I am confident about the future of airfreight, we have the right opportunity to be more sustainable, optimize productivity, change and start thinking about the future,” said Marsoin.

MROS: KEY FOR SAFE, RELIABLE AEROSPACE MOBILITY

MRO services are a crucial support for flight operations, as both scheduled and unscheduled maintenance represent the highest impact cost in aviation. To supply

the MRO services Mexico’s fleet requires, the country has a total of 305 aeronautical workshops that provide support and maintenance services to both fixed wing

and rotary wing aircraft. The MRO services helicopters require are highly different from those of airplanes and present significant opportunities within the aerospace value chain.

“A power unit with flight capabilities must always operate under the safest conditions marked by the manufacturer’s guidelines,” said Jorge Vega, Commercial Manager, ASeSA MRO.

Out of the 305 MRO workshops in Mexico, 202 focus on airplanes and the remaining 103 specialize on helicopters, although most workshops service the commercial aviation sector. Mexico has a 7,040-aircraft fleet, considering commercial aircraft, business and government aircraft. Of that fleet, 703 aircraft are helicopters of eight brands: Agusta, Airbus, Bell Textron, enstrom, MD, Robinson, Schweizer and Sikorsky. About 62 percent of the fleet is composed of Bell Textron helicopters, followed by Airbus with 18 percent and Agusta with 10 percent.

Generally, the maintenance provided falls into three distinct categories. The first is preventive maintenance, which is performed following a set amount of flight hours, aircraft cycles or warm-ups. The second is corrective maintenance, which is given to fix a failure reported during the pre-flight, flight or postflight stages. Finally, there is the major repair of components, which occurs when more indepth maintenance of the aircraft is required after a predetermined number of flight-cycles.

All aircraft in general must operate safely and efficiently. However, safety and reliability must be also balanced with maintenance costs to remain competitive and economically viable. For this reason, MROs must align

their services’ supply with the productivity and profitability of the flight operations of different aircraft. To extend the value of aircraft assets, pertinent maintenance is a key element. “Maintenance is geared towards maintaining the value of the helicopter not only for its operation, but also to preserve its value as an asset,” Vega noted.

HeliOffshore data reports that, between January 2013 and December 2019, a total of 65 aircraft accidents were recorded. Preventing these accidents is only possible through the regular and reliable maintenance of aircraft. “MROs are committed that, through safe operations, compliance with procedures, incorporation of management tools for planning, execution and supply chain, we generate the right conditions to provide the highest quality maintenance possible,” said Vega.

ASeSA MRO has consolidated its leadership by providing maintenance services that promote safety and reliability for the industry. In 2021, AS e SA MRO covered 4,963 maintenance service orders. AS e SA MRO is strategically distributed throughout the country thanks to its three workshops located in Mexico City, Monterrey and Ciudad del Carmen. The latter is the company’s main base, where it assists the largest concentration of helicopters for oil and gas operations. With 16,000m2 of hangars in its three workshops, AS e SA MRO has the capacity to service 30 helicopters on the shop floor simultaneously. In addition, the company has a Mobile Repair Team (MRT), which is a high-performance work unit that can go on site to attend failures outside the helicopter base. These capabilities set AS e SA MRO aside from competitors when assisting helicopters’ maintenance.

AIRBUS TAKES THE NEXT STEP IN SUSTAINABILITY

Hydrogen-powered flights are a long-time goal of the aerospace industry that could become a reality thanks to Airbus’s three Z e ROe. The Z e ROe concept aircraft are powered by hydrogen combustion through modified gas turbine engines and aim to

become the world’s first zero-emission commercial aircraf t by 2035.

Hydrogen’s energy-per-unit mass is three times higher than that of traditional jet fuel. If generated from renewable energy

through electrolysis, hydrogen emits no CO2 emissions, generating renewable energy to potentially power large aircraft over long distances without undesirable emissions.

All three Z e ROe concepts are hybridhydrogen aircraft powered by hydrogen combustion. In addition, hydrogen fuel cells create electrical power that complements the gas turbine, resulting in a highly efficient hybrid-electric propulsion system. All of these technologies are complementary and the benefits are additive.

In 2022, Airbus launched the Z e ROe demonstrator to test hydrogen combustion technology on an A380 multimodal platform. Through ground and flight testing, Airbus “expects to achieve a mature technology readiness level for a hydrogen-combustion propulsion system by 2025,” said Damien Sternchuss, Vice President and Head of Airline Marketing for Latin America and the Caribbea n, Airbus.

Airbus aims to become a pioneer for sustainable aviation. While aviation only generates 2.5 percent of the global CO2 emissions, the O eM is committed to reduce these emissions, said Sternchuss. Some of Airbus’s first attempts included jet-age aircraft that reduced CO2 emissions by 80 percent. “These also reduced noise by 75 percent, which is very important when operating in urban areas,” said Sternchuss.

Airbus’s goal is to operate with 100 percent sustainable aviation fuel (SAF) before 2030 and to be the first major manufacturer to offer a climate neutral commercial aircraft by 2035. The O e M aims to reach zero-emission aviation by 2050. The Z e ROe is the materialization of thes e efforts.

The first of these three aircraft is a turbofan designed for 120-200 passengers with a range of over 2,000 nautical miles, capable of operating trans-continentally and powered by a modified gas-turbine engine running on hydrogen, rather than jet fuel. In this case, the liquid hydrogen will be stored and distributed via tanks located behind the rear pressure bulkhead.

The second eZeRO aircraft is a turboprop for up to 100 passengers, which uses a turboprop engine instead of a turbofan. This aircraft is powered by hydrogen combustion in modified gas-turbine engines. The aircraft would be capable of traveling over 1,000 nautical miles, making it a perfect option for short-haul trips.

The last one is a “blended-wing body” design for up to 200 passengers. In this model the wings merge with the main body of the aircraft. The exceptionally wide fuselage opens up multiple options for hydrogen storage and distribution and for cabin layout. This model would have a similar range than the turbofan.

To seamlessly operate these aircraft, collaboration with airports is fundamental, said Sternchuss. Airports transport heavy goods including machinery, buses, trucks and aircraft, but they could also become hydrogen hubs in preparation for zero emission aviation.

As part of its sustainability efforts, Airbus had previously introduced its 100 percent SAF aircraft family. “These operated with 25 percent less fuel and generated less CO2 versus previous aircraft generations,” said Sternchuss. This sustainable aviation fuel

journey was possible through the support of different companies that share their same sustainability values, such as the Aviation Center in Germany, Canada and the University of Manchester, he added.

Airbus also introduced the Fello’fly concept, which performs wake energy retrieval similar to migrating birds flying in the “V” patterns. “Airbus is fully engaged in driving the sector to carbon neutral aviation, leading the change through the aviation industry roadmap,” said Sternchuss.

HALCÓN 2: THE FIRST MADE-IN-MEXICO-AIRPLANE IN 70 YEARS

After 70 years of not having an aircraft designed and produced in Mexico, Horizontec came to shift the country’s aeronautical history in 2014. The company has launched the Halcón 1 and is developing the Halcón 2, which will become its first commercial product. Innovative technologies and composite materials are some of the characteristics that make these aircraft unique. They also showcase the engineering capabilities of Mexican talent, while offering a light sports-quality aircraft.

“Halcón’s project model is an ideal asset for the more than 150 aviation schools working to train tomorrow’s talent, given its safety measures for both the pilots and the prototype”

Giovanni Angelucci CEO | Horizontec

“The Halcón 2 aims to address the needs of Mexican aviation by offering competitive advantages such as efficiency, low flighthour costs, ergonomics and safety during flight. Besides, it is composed of quality materials and well-designed,” said Diego Sinhue, Governor of Guanajuato, during the inauguration of Horizontec’s n ew plant.

Being a pioneer in the sector brough Horizontec several challenges. “It has been

challenging to find trusted suppliers because they did not have our knowhow nor met our expectations. This forced Horizontec to build these capabilities,” said Humberto Montaño Valdez, Operations Manager and Design Area, Horizontec.

The implementation of composite materials has not been easy. Although the use of carbon fiber makes aircraft lighter, few companies use it so the calculations to use it had to be developed by Horizontec’s engineers. This process require the development of a new software. “Horizontec has developed an engineering platform with the capacity to design and test structural and aerodynamic models for the accelerated construction of new prototypes,” said Giovanni Angelucci, CeO, Horizontec.

Moreover, supplies were hard to find. At the beginning, the company struggled with finding suppliers of quality materials, leading the company to develop alternatives and bet on the diversification of its supplier base and look for alternatives of common materials. Horizontec also faced a gap between design and manufacturing that had to be reduced through efficient communication. It also struggled to find qualified professionals.

Despite the challenges, Horizontec succeeded in developing and certifying the Halcón 1 and is in line to certify the Halcón 2. Horizontec has allied with

CONACyt to make this process a reality. The certifications involve the evaluation of the airplane’s design, production and maintenance, among other characteristics. However, Mexican regulations have gaps that make the certification process harder. For example, regulations force companies to show an import certification, which Horizontec cannot fulfill because it uses local supplies. “Certifying Horizontec’s Halcón 1 and 2 may have been a tedious process, but their design, production and bilateral certifications provides international legitimacy for immediate export,” said edgar Martínez Ortega, Project Manager and Certification Area, Horizontec.

The production and certification of the Halcón 2 is only the beginning of Horizontec’s future plans. By the end of 2022, the brand expects to have produced about 50 aircraft and between 15 and 20 units during 2023. “Through the production of an efficient and cost-effective asset, we aim to democratize aviation,” said Angelucci.

Horizontec aims to partner with aviation schools because its safety elements, such as the incorporated parachutes, could help to train future pilots. “Halcón’s project model is an ideal asset for the more than 150 aviation schools working to train tomorrow’s talent, given its safety measures for both the pilots and the prototype,” said Angelucci.

Horizontec is boosting Guanajuato’s aerospace industry, which in 2020 exported US$5.8 million in aero parts, turbojets,

turboprops and gas turbines. The company is also supporting Bajio’s cluster goals. Guanajuato has a strong automotive industry supported by certified companies with highly qualified human capital and wellestablished processes. Through companies like Horizontec and the work of clusters, the state’s aerospace industry can also position itself in global supply chains.

“Our goal as a cluster is to help those companies transition and begin manufacturing for the aerospace sector. Guanajuato’s companies are highly focused on developing technology. The cluster has been expanding its use of technology and embracing trends, such as machine learning, AI and big data, which has allowed us to identify unexplored market niches,” said Óscar Rodríguez, President Bajio Aerospace Cluster (BJXAerospace) to MBN.

After 70 years of not having an aircraft designed and produced in Mexico, Horizontec came to shift the country’s aeronautical history in 2014. The company has launched the Halcón 1 and is developing the Halcón 2, which will become its first commercial product. Innovative technologies and composite materials are some of the characteristics that make these aircraft unique. They also showcase the engineering capabilities of Mexican talent, while offering a light sports-quality aircraft.

“The Halcón 2 aims to address the needs of Mexican aviation by offering competitive advantages such as efficiency, low flight-

hour costs, ergonomics and safety during flight. Besides, it is composed of quality materials and well-designed,” said Diego Sinhue, Governor of Guanajuato, during the inauguration of Horizontec’s n ew plant.

Being a pioneer in the sector brough Horizontec several challenges. “It has been challenging to find trusted suppliers because they did not have our knowhow nor met our expectations. This forced Horizontec to build these capabilities,” said Humberto Montaño Valdez, Operations Manager and Design Area, H orizontec.

The implementation of composite materials has not been easy. Although the use of carbon fiber makes aircraft lighter, few companies use it so the calculations to use it had to be developed by Horizontec’s engineers. This process require the development of a new software. “Horizontec has developed an engineering platform with the capacity to design and test structural and aerodynamic models for the accelerated construction of new prototypes,” said Giovanni Angelucci, CeO, H orizontec.

Moreover, supplies were hard to find. At the beginning, the company struggled with finding suppliers of quality materials, leading the company to develop alternatives and bet on the diversification of its supplier base and look for alternatives of common materials. Horizontec also faced a gap between design and manufacturing that had to be reduced through efficient communication. It also struggled to find qualified professionals.

Despite the challenges, Horizontec succeeded in developing and certifying the Halcón 1 and is in line to certify the Halcón 2. Horizontec has allied with CONACyt to make this process a reality. The certifications involve the evaluation of the airplane’s design, production and maintenance, among other characteristics. However, Mexican regulations have gaps that make the certification process harder. For example, regulations force companies to show an import certification, which Horizontec cannot fulfill because it uses local supplies. “Certifying Horizontec’s Halcón 1 and 2 may have been a tedious process, but their design, production and bilateral certifications provides international legitimacy for immediate export,” said edgar Martínez Ortega, Project Manager and Certification Area, Horizontec.

The production and certification of the Halcón 2 is only the beginning of Horizontec’s future plans. By the end of 2022, the brand expects to have produced about 50 aircraft and between 15 and 20 units during 2023. “Through the production of an efficient and cost-effective asset, we aim to democratize aviation,” said Angelucci.

Horizontec aims to partner with aviation schools because its safety elements, such as the incorporated parachutes, could help to train future pilots. “Halcón’s project model is an ideal asset for the more than 150 aviation schools working to train tomorrow’s talent, given its safety measures for both the pilots and the prototype,” said Angelucci.

Horizontec is boosting Guanajuato’s aerospace industry, which in 2020

exported US$5.8 million in aero parts, turbojets, turboprops and gas turbines. The company is also supporting Bajio’s cluster goals. Guanajuato has a strong automotive industry supported by certified companies with highly qualified human capital and well-established processes. Through companies like Horizontec and the work of clusters, the state’s aerospace industry can also position itself in global supp ly chains.

“Our goal as a cluster is to help those companies transition and begin manufacturing for the aerospace sector. Guanajuato’s companies are highly focused on developing technology. The cluster has been expanding its use of technology and embracing trends, such as machine learning, AI and big data, which has allowed us to identify unexplored market niches,” said Óscar Rodríguez, President Bajio Aerospace Cluster (BJXAerospace) to MBN.

ADVANCED AIR MOBILITY: THE NEW FRONTIER IN DISRUPTIVE INNOVATION

The high concentration of people and vehicles in urban centers has led to high levels of pollution, while trapping many people in traffic for long periods. These trends have led to a decrease in life quality but both traffic and pollution could be reduced through the introduction of a disruptive innovation that can optimize traffic in cities: Advanced Air Mobility (AAM).

AAM, referring to the concept of using vertical takeoff and landing vehicles in urban areas, has the potential to drastically change the way people travel and the way people live in the cities and its surroundings. Nowadays, AAM is one of the disruptive and eco-friendly innovations that can drive social transformation. But for innovation to be truly disruptive its benefits must be available for a large percentage of the population. “When a disruptive innovation

succeeds, huge changes happen in a short time,” said Antonio Campello, Founder, Innova 2 elevate.

While AAM is still not a reality, many companies are making great strides to make this technology possible and introduce environmentally friendly vehicles to cities. Developers are investing in electric vertical take-off and landing (eVTOL), electric conventional takeoff and landing (eCTOL) and electric short take-off and landing (eSTOL) technologies, all of which produce no CO2 emissions. Through new technologies and business models, the goal to achieve eco air transportation for short and mid-range distances, at an accessible price, is becoming more viable. Optimally, the ticket’s price of air mobility should be as low as possible to allow millions of people within a city or country-side to fly free of traffic.

To make air mobility possible, new business models that will assure affordable ticket pricing should be pursued. These business models should consider an initial fare of US$5 per mile per person and throughout time lower the fare to US$2 per mile per person, said Campello. These fares will allow air mobility to compete with ground transportation.

To provide faster air transportation of both passengers and cargo, a new ecosystem must be created. Hubs for multimodal transportation will be fundamental to develop air mobility. e xisting installations like shopping malls can be adapted to host multimodal transportation hubs, as the added flexibility will encourage b usinesses.

Disruptive innovation will demand new regulations. Authorities in Mexico and abroad are closely following the potential of air mobility. everything that flies should be under the supervision of the aeronautical authorities to provide a safe and efficient environment for future air mobility and transportation, explained Campello.

The AAM boom is approaching. Morgan Stanley estimates this market will be valued at US$1 trillion by 2040. When excess liquidity merges with disruptive innovation, it allows for startup businesses to develop faster, accelerating technological maturity. In the case of AAM, the ride ticket price will be the breakthrough that will show the maturity of this technology, potentially allowing the market to take off.

AAM will also create new business opportunities that will ignite economic growth. Aircraft manufacturing and its related value chain are some of the new areas of opportunity where Mexico can show a competitive advantage, explained Campello. Cities must prepare and business readapt to capture the new opportunities brought about by th is trend.

Before entering the mainstream, AAM will have to overcome several obstacles. Chief among these challenges is energy storage, which still has to mature to allow these aircraft to be fueled by electricity during the time it takes the vehicle to complete its route. Moreover, AAM certification is still in its early stages and clear quality standards for product, manufacturing and operation must be defined and ag reed upon.

Direct operating costs will be the key driver of the adoption of AAM. When operating costs drop, further implementation of AAM solutions will become more attractive and economically viable. However, public acceptance and adaptation will define the success of AAM. Adapting to disruptive innovation might cause resistance. The speed at which societies incorporate AAMs into their daily lives will mark the degree of success of this disruptive i nnovation.

“A disruptive innovation process with a cultural change that includes social and environmental benefits will transform social interactions and guide society toward sustainability and wellbeing. That is the potential AAM has to revolutionize our transport dynamics,” said Campello.

THE BOOMING AEROSPACE INDUSTRY NEEDS A STRONGER WORKFORCE

Attracting and retaining talent in the aerospace industry has always been challenging but it has proved especially difficult over the past few years due to the rise of high-tech companies in other fields. t he shortage has put many companies in a fierce competition for the best and the brightest. As a result, the industry is looking for professionals with a new skillset that includes management of communication abilities.

“We

are receiving colleagues that share our values of creativity, respect and innovation. As such, we provide our current workers with the skills for novel technologies and novel consumption behavior”

Ana Molina Human Resources Senior Manager | Airbus

“After the pandemic, we are looking for quick, adaptable and flexible professionals that know how to balance technical and personal skills such as teamwork, empathy and skills on personal communication,” said efrain Pérez, talent Acquisition and Compensation Manager, safran.

t he aerospace and space sectors are increasingly looking for professionals to work in satellites, communication, aviation and air observation, among other areas. this means seeking workers with diverse backgrounds that can leverage new technologies like additive manufacturing, robotics, modeling and simulation. t hese workers must also be capable of using the latest virtual tools to help accelerate production to meet the demand. for example, the Mexican s pace Agency (AeM) needs experts in the analysis and processing of satellite images, remote sensing and air observation, said g eneral Director salvador landeros Ayala.

t here is an urgent need to educate and train professionals in space and space

exploration, said landeros. “Missions to the moon and mars are far too advanced for Mexico not to have prepared professionals to join,” he added. “ this would also require professionals trained on space medicine, chemistry and biology to identify ancient organic compounds on Mars.”

Beyond training a new aerospace workforce, the industry is also reincorporating the displaced employees who lost their jobs as a result of the economic crisis caused by the CoViD-19 pandemic. in the past six months, the industry has reintegrated 5,000 workers that were let go during that period. “As we hire more people, we are noticing that a lot of people come from other states of the country, specially from the northern region of Mexico,” said Pérez.

the need for professionals in this industry makes integration and reintegration easy, said Pérez. He added that recruiters are looking for experience and skills. t hus, “competent professionals will for sure have a place at safran.”

While the space industry is growing rapidly, it “did not have displaced workers; we are currently hiring and investment in this sector is growing, meaning that we need more people for the incoming projects that this investment will generate,” said l anderos.

french planemaker Airbus reports a similar situation: “We are growing and facing a ramp up,” said Ana Molina, Human r esources senior Manager, Airbus Helicopters México Querétaro. “We are receiving colleagues that share our values of creativity, respect and innovation. As such, we provide our current workers with the skills for novel technologies and novel consumption behavior.”

the aerospace industry is highly dynamic, said Pérez, so workers have the opportunity to move and grow quickly. t hus, each company needs to ensure it offers the

best conditions to their employees. “As a company, we need to be more conscious about our talent and offer personalized benefits that are attractive to new generations with things such as home office, insurance and attractive mobility options so employees can work internationally to expand their knowledge,” said Pérez.

Beyond on the job training, the industry needs to rely on academia. “We need more undergraduate and graduate programs at universities. We currently have very few programs for the space industry and we are going to need many experts in the coming years so we need to start enhancing education, not just in aerospace but in space careers,” said Landeros. This should not be difficult as universities already

have programs for telecommunications, computer science and mechanics, among other technical careers, he added.

“We are currently experiencing a period of opportunity to innovate and recreate the good practices we have been working with to reach more professionals,” said Molina. “Thus, if we teach them the right skills, these professionals will come to our companies as long as we have the right offer to respond to their talent.”

Mexican talent is recognized around the world for its quality, said e nrique Sosa, Dean, UNAQ. “There are many Mexican experts in aerospace and aeronautics but there is indeed an urgency to retain them in the country.”

MEXICO’S AEROSPACE INDUSTRY IS BOU NCING BACK

Before 2020, Mexico’s aerospace industry was growing at an accelerated pace. But the COVID-19 pandemic brought a decrease in exports and drastically reduced travel, greatly slowing down aircraft production. As the Russia-Ukraine war and COVID-19 variants keep delaying the sector’s recovery, the rebound of the aerospace sector hinges on growth opportunities such as the forecasted demand of narrow-body aircraft and the upcoming spa ce sector.

“Between 2014 and 2019, the aerospace industry was considered a new sector with exceptional growth mainly in commercial aeronautics”

Luis Gerardo Lizcano President | FEMIA

“Between 2014 and 2019, the aerospace industry was considered a new sector with exceptional growth mainly in commercial aeronautics,” said Luis Lizcano, General Director, Mexican Federation of the Aerospace Industry (F e MIA). During that period, the industry reported a positive trade balance of 18 percent and by 2016,

Mexico was the 12th largest aerospace exporting country.

The industry kept growing at an accelerated pace before the COVID-19 pandemic. In 2019, Mexico had 368 aerospace business units. Of those, 86 percent were manufacturing plants, followed by Maintenance Repair Overhaul (MRO) units with 12 percent and design and engineering plants with 11 percent. Most of those plants were concentrated in the north of the country, with Baja California reporting the largest number of aerospace facilities. The industry was responsible for over 60,000 direct jobs in 19 states.

That year, aviation exports amounted to US$9.68 billion, making Mexico the sixth largest exporter of aerospace parts to the US. “Overall, 2019 was a successful year for the industry in Mexico,” said Lizcano.

However, the aviation industry received a blow in 2019 with the grounding of the Boeing 737 Max, but its production continued until early 2020. Once production of the 737 Max stopped, Boeing’s shares dropped by 3.3 percent. During that period, COVID-19 cases were quickly rising and

starting to seriously impact the global economy. Both the grounding of the 737 Max and the COVID-19 pandemic greatly affected the aerospace industry, with OeMs dramatically reducing production of new aircraft and global air passenger traffic decreasing to levels not seen in decades.

Globally, commercial aircraft orders decreased by 59 percent in 2020. In April 2020, Mexico’s aerospace exports dramatically decreased. Compared with 2019, exports contracted by 31. 8 percent.

Fortunately, Mexico’s aerospace industry started to bounce back in 2021 as exports increased by 6 percent. However, the sector has not recovered its pre-pandemic numbers. By late 2022, experts hope for an increase of 16 percent in exports but forecast that they will not surpass 2019’s levels until 2024, explained Lizcano.

The industry keeps facing several challenges delaying its growth. “Although the COVID-19 recovery phase is underway, the outbreak of SARS-CoV-2 variants continues to destabilize the market. By early 2022, the industry expected more vigorous growth but the Omicron variant delayed this process,” said Lizcano. Moreover, the Ukraine-Russia conflict caused a disruption in logistics and hindered the supply of titanium, which is produced in the region.

Boosting the recovery of the industry is the fact that people are traveling again, which will increase demand for narrowbody aircraft. Demand for air cargo also increased following the e-commerce boom, which forced airlines to transform their fleet according to the needs of the market.

The global industry market outlook suggests that in the future there will be an emphasis on fleet versatility. The cargo sector is still affected by the global context but the COVID-19 outbreak allowed the sector to become more relevant to the economy. During the COVID-19 outbreak, “cargo transportation was globally considered an essential activity for the continuity of economic activities and most importantly for the lives of people,” said Jorge L. Torres, Vice President, Fed e x e xpre ss Mexico.

Although the sector is recovering, companies must focus on building more resilient supply chains that can handle future shocks. Supply chains must be prepared to endure highly disruptive events and quickly recover. Mexico also has the opportunity to restructure its supply chains by diversifying them to become less dependent on single sources. Other opportunities are also arising. “Space is becoming a trend and Mexico should start exploiting this opportunity,” said Lizcano.